Customer-Centric Transformation: What Good Looks Like – Acquisition – Understanding Acquisition – Part 13a of 14


 

Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

 

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

 

The REAP Customer-Centric Organisation Blueprint®

 

REAP CCOB for Blog

 

 

 

This week we are dealing with Acquisition which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and includes Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

 

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

 

Each of the four Execution capability areas is made up of sub-components. The Acquisition dimension focuses on the specific, practical activities that will support you to increase both the quality and volume of new customers. Acquisition explores ways in which you can increase the size of your customer universe and your share of it. The 5 sub-components of the Acquisition dimension are ‘Understanding Acquisition,’  ‘Identifying New Prospects,’ ‘Managing Interest,’ ‘Converting Sales,’ and ‘Setting up & Activating.’  Each of these areas is addressed in separate, individual blog posts.

 

Transformation Intent – Acquisition

 

“A customer-centric Acquisition approach begins with a clear and intimate understanding of your customer universe and the factors that impact your ability to sell to them. Acquiring your share of this customer universe is achieved through appropriate targeted marketing activity across a broad range of relevant channels and media, and interest generated is managed effectively so that prospects are kept warm until the sale is closed. While the sales process itself should focus on closing the sale, it should also take into account effective lead management, specific sales targets and rewards and careful controls over pricing. Customer-centricity also recognises that new clients have not been secured until you have taken them through an experience-based initiation process, where they are made to feel welcome and are well informed.”

 

What Good Looks Like – Understanding Acquisition

 

  • The current and potential size of the customer universe/s for the organisation’s market/s is understood, making acquisition planning and targeting realistic and not just based on previous year plus x%. The Universe share (as opposed to market volume share) is fully understood for each of the main competitors.
  • Sales processes are understood in terms of both why they fail and why they succeed, from both the internal and the customer point of view, as well as which internal / market factors most impact on sales success rates.
  • The demographic and socio-graphic nature of newly acquired customers from each channel / source is understood, along with how far and how quickly their value builds up to its peak level. Acquisition activity is increasingly targeted at attracting good customers and not just any customer.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

 

Customer-Centric Transformation: What Good Looks Like – Efficiency – Controlling Costs – Part 12b of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Efficiency which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Efficiency dimension seeks to manage costs from a customer profitability perspective and evaluates costs in reference to the value of the customer for whom those costs are incurred. The 2 sub-components of the Efficiency dimension are ‘Calculating & Allocating Costs’ and ‘Controlling Costs.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Efficiency

“In treating different customers differently, your organisation needs to develop the capability to optimise customer profitability through the efficient calculation, allocation and control of customer costs in retaining, acquiring and developing your customers across all segments and channels. This enables you to perform value analysis in a way that supports your customer engagement within the defined profit bands per customer and per segment, and if need be, influencing their behaviour to reduce the cost-to-serve or even terminating them as customers if necessary.”

What Good Looks Like – Controlling Costs

  • The relative costs of acquiring, retaining and developing customers by each channel are understood and have an influence on customers’ allocation / entitlement to each channel. Maximum acceptable acquisition costs are calculated for each customer type and mechanisms in place to stop acquisition activity or hold back sales costs (commissions) if necessary.
  • Marketing costs are controlled by formal optimization, moving towards inbound targeting and by reducing or stopping marketing to some customers where the cost cannot be justified.
  • The drivers of cost-to-serve variations are understood and the overall cost-to-serve level is being reduced by changing buying behaviours and maximizing the use of self-service wherever possible.
  • The various costs of failure and wastage are understood and fully considered in work to improve customer processes.
  • The organisation has an ethos, relevant definition and sensitive processes that allow high cost (compared to revenue) customers to be stimulated to leave.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

CORRECTION: Customer-Centric Transformation: What Good Looks Like – Efficiency – Calculating & Allocating Costs – Part 12a of 14


THIS ORIGINAL POSTING HAD AN ERROR – THE DESCRIPTOR RELATING TO ‘WHAT GOOD LOOKS LIKE – CALCULATING & ALLOCATING COSTS’ WAS INCORRECT. PLEASE ACCEPT MY APOLOGIES – THE CORRECT CONTENT IS NOW INCLUDED:

 

Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week we are dealing with Efficiency which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Efficiency dimension seeks to manage costs from a customer profitability perspective and evaluates costs in reference to the value of the customer for whom those costs are incurred. The 2 sub-components of the Efficiency dimension are ‘Calculating & Allocating Costs’ and ‘Controlling Costs.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Efficiency

“In treating different customers differently, your organisation needs to develop the capability to optimise customer profitability through the efficient calculation, allocation and control of customer costs in retaining, acquiring and developing your customers across all segments and channels. This enables you to perform value analysis in a way that supports your customer engagement within the defined profit bands per customer and per segment, and if need be, influencing their behaviour to reduce the cost-to-serve or even terminating them as customers if necessary.”

 

What Good Looks Like – Calculating & Allocating Costs

  • The operating costs and even a sensible proportion of overheads that can be attributed to customer transactions and behaviours have been identified and either sourced from relevant finance systems or a meaningful estimation approach developed.
  • These identified costs have been allocated to customers in a way that: allows them to be included in value analysis; recognises the difference between acquisition and service costs; enables match back to financial accounts.
  • Responsibility for the level of cost represented by all customer groups and individual key customers has been allocated and all staff understand the importance of controlling customer-related costs.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer-Centric Transformation: What Good Looks Like – Efficiency – Calculating & Allocating Costs – Part 12a of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

 

 

 

 

 

 

 

This week we are dealing with Efficiency which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. The Efficiency dimension seeks to manage costs from a customer profitability perspective and evaluates costs in reference to the value of the customer for whom those costs are incurred. The 2 sub-components of the Efficiency dimension are ‘Calculating & Allocating Costs’ and ‘Controlling Costs.’ Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Efficiency

“In treating different customers differently, your organisation needs to develop the capability to optimise customer profitability through the efficient calculation, allocation and control of customer costs in retaining, acquiring and developing your customers across all segments and channels. This enables you to perform value analysis in a way that supports your customer engagement within the defined profit bands per customer and per segment, and if need be, influencing their behaviour to reduce the cost-to-serve or even terminating them as customers if necessary.”

 

What Good Looks Like – Calculating & Allocating Costs

  • Communication of dissatisfaction is encouraged from customers both directly and via staff. It is pro-actively drawn out by internal processes, even if there is no formal complaint.
  • Complaints via regulatory bodies are dealt with enthusiastically and in a way that ensures their response standards are always met. Formal complaints received directly from customers are dealt with consistently across the organisation, to clearly defined standards which are themselves transparent to customers.
  • Analysis of complaints extends to deep ‘root-cause’ levels and reporting is reviewed by very senior managers who are told the whole story.
  • Issues likely to cause widespread dissatisfaction are dealt with quickly and incisively, using social and traditional media, making use of advocates and fans wherever possible.
  • Relationship recovery is seen as an integral part of the dissatisfaction management process and is applied re-actively and/or pro-actively against a clear set of criteria of where it should be applied.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y

Customer Management Trends and what is important in 2014


It’s that time of the year again when we take out the crystal ball to help us understand the evolving customer management transformation journey.  I’ve put together a combination of strategic imperatives and my observations and insights that relate to each of the imperatives

Enlightened leadership will remain a rare trait – yet without it, forget customer-centric transformation:

By and large the executive team will continue to respond rationally to a world which they understand and recognise but which no longer exists (Ben Obeng) and most organisations will continue along the journey of mediocrity, incrementalism and better sameness. Enlightened leaders, on the other hand, will focus on finding new ways to create, to deliver and to capture value through the lens of the customer, rather than through the lens of the current business model, and will deliver a unique and distinctive customer experience through empowered employees who ascribe to a culture, rather than a rule book.

Living Company Values really matters:

Having a non-negotiable set of values that is strictly adhered to and carries much greater weight than individual performance, is the secret sauce. Businesses that abdicate the customer experience (albeit with good intentions) introduce randomness and inconsistency. Not the way to get people to sit up, take notice and talk about you. Values will, in general, remain nothing other than a ‘words’ which are not part of organisational DNA.

Clarity as to what you stand for, AND what you stand against:

Have a good story about what your brand, product and/or service experience stands for and what that means. Equally important, have a story that also creates clarity about what your brand, product and/or service experience stand against. Metro Bank, a UK high street bank launched in July 2010, exists to provide excellent customer service. They stand against ‘stupid bank rules.’ – this means that they design every procedure around what works for customers, rather than what suits them. 

It’s all about Systems Thinking:

Most organisations won’t ‘get this.’ Customer management is systemic in nature – the enterprise needs to be viewed as a whole, comprised of many parts or functions, yet at the same time it is more than the sum of the individual parts – each part (or function) affects the behaviour of the whole. No part (or function) has an independent effect on the overall enterprise and the overall enterprise has properties which none of the parts have. Going to market with a customer-centric business model requires an understanding of the ‘interaction’ of the functions and the resultant capability of the entire enterprise.

It’s about Insight:

Whether small data or big data, it’s about generating as much relevant insight as possible. Multiple sources of information gathering in structured and unstructured format, in real time across multiple platforms, text analytics and the technology infrastructure support deeper insights that together, enable more effective planning.

Strategy must include, and focus on, ALL drivers of customer value:

Think REAP. There are only 4 drivers that you can use to increase the profitability of customer based activities. Retain more customers for longer, focussing on the best customers. Manage, and decrease (in some deserving cases, increase based upon predictive value models) customer related costs – Efficiency. Acquire a better mix of customers and develop (Penetrate) both the direct and indirect financial value of all customers (up-sell; cross-sell, advocacy, word of mouth).

Most businesses won’t optimise their balance across these drivers

Talent: It’s all about people:

When hiring look for candidates with a questioning disposition (constantly challenging), a connecting disposition (people connecting/colliding to solve challenges), expression of vulnerability (building trust based relationships) and a strong narrative (key driver of success.) Hire people who don’t need support and then support them as much as you can (Google). Consider the impact on the business model of millenials moving into management at a very early age – e.g. Google & Facebook.

Understand the customer journey in detail and be clear as to where you will create your ‘high contrast’ signature experience:

You can’t be the best at absolutely everything so be absolutely clear as to what you want to become known for. At which moments of truth or touchpoint do you want to be 10x better than your nearest competitor? Focus your attention at delivering profound excellence in a specific area and spend less time and money developing a ‘little bit’ of excellence across all touchpoints. Customers don’t notice and don’t care much for incrementalism.

Measures – stop fooling yourself that a measure like CSAT or NPS can drive your customer-management strategy:

Many organisations will fail in this regard. As with any good dashboard, a set of measures are required. You’re fooling yourself if you think ‘a single question’ is sufficient. A blend of measures, leading and lagging, is required. Really important is to have a measure of internal customer management capability that recognises the ‘system.’ Also important is to measure customer satisfaction, employee satisfaction (you can’t be customer-centric if you’re not employee-centric), NPS and customer effort. Understand the interdependencies across these measures; absolutely critical for strategic refinement.

Agility:

What? You’ve got to be joking! We have processes to adhere to and internal SLA’s.

Time is one of the most precious resources of any enterprise and of clients/consumers. Strategic agility is the ability to capitalise on opportunities and dodge threats with speed and with assurance. Without agility you lose the capability to ‘leap-frog’ competition and react nimbly to changing market dynamics and customer needs.

Content is king:

Today’s customer is content thirsty, yet also very discerning of what they view, read and share. Great content is the keystone of digital success, yet sustainable content generation is most often not given the prioritisation it needs

Innovation comes from anywhere. Encourage & Harness it:

This is one of the nine core principles of innovation at Google. It calls for the development of an Innovation Culture. Innovation can come from the top down as well as bottom up, and in the places you least expect. For example, a medical doctor on Google’s staff argued persuasively that Google had a moral obligation to extend help to those typing searches under the phrase “how to commit suicide.” He ignited the charge to adjust the search engine’s response so that the top of the screen reveals the toll free phone number for the National Suicide Prevention Hotline. The call volume went up by nine percent soon thereafter. The same change has been adopted in many other countries.

Experimentation:

This requires an ‘outside-in’ mind-set supported by client/customer collaboration and co-creation. The idea is not to wait for what you perceive to be perfection because, through the customer lens, it’s unlikely to be. Rather, iterate your experience amongst a ‘test segment’ of client or customer. Be prepared to fail fast or scale quickly, depending on the outcome.

Your thoughts?

Customer-Centricity! Past it’s ‘Sell By’ date?


Firstly – some context!

For the last 10 years I’ve focussed almost exclusively on working with large businesses to assist in designing and operationalizing customer-centric business models, using our integrated methodology to assess, benchmark and quantify enterprise wide customer-centric capability and then design the transformation programme and business case.

I also published a book earlier this year which titled ‘The Customer Centric Blueprint: Building & Leading the 21st Century Organisation.’

So………..why would I ask this question with so much invested in the principles of customer-centricity?

Well frankly, most organisations have done a really poor job in developing and operationalizing their customer-centric intentions. One of the key reasons for this is an inability to innovate the business model through the ‘customer lens.’ Instead, businesses attempt to force-fit the customer strategy and programme plan into their current business model which, in most cases, requires major surgery if there is to be any chance of successful customer-centric execution. Because many organisations fail to understand the systemic nature of customer-centric capability, many organisations believe that all the focus has to be ‘on the customer’ if they are to become customer-centric. Many times I’ve been subject to unacceptable supplier/vendor relationship standards and practices yet I’ve seen/experienced a positive change as a customer (rather than supplier) of the organisation. In this reality, there may have been some alignment around development and delivery of products and services and possibly some level of incremental innovation, based upon a customer focus, but these principles, in all likelihood, haven’t been extended to other stakeholders.

So if we think about a natural evolution of customer-centricity it could be argued that ‘stakeholder-centricity’ should be the new focus. All stakeholders, customers, employees, suppliers, business partners, society, shareholders should be considered in the transformation programme. The stakeholder community will have varied, and often opposing, wants, needs and expectations. Shareholders may want above average returns, short term. Customers may want both a rationale and emotional engagement and consistent delivery of a superior customer experience or lowest price. Employees may want to work for an organisation with values that align with their own, an organisation with a ‘mission that matters’ and an organisation that provides the opportunity to grow and develop in a meaningful way. The community may want to see a commitment to environmental sustainability and government may want adherence to regulation/compliance that may, in fact, add a ‘hassle factor’ to the customer experience. Stakeholder-centricity involves all stakeholders developing an emotional connection with the company and the company maximising value to society, rather than just for customers or shareholders.

I’m seeing a step that goes beyond stakeholder-centricity! The reality is that enlightened leadership has, whether consciously or not, moved on. The real leaders have moved on to ‘human–centricity.’ No matter how sophisticated our use of technology and how streamlined and optimised our processes are, we are ultimately at the mercy of the way that we, as human beings, interact with one another. It’s all about ‘human-beings being human’

The question we need to consider is whether there is really a difference between customer-centricity, stakeholder-centricity and human-centricity. For me it’s about the definition of the various terms, it’s about clarity as to what this means for the business, it’s about the underlying framework being used to ensure the organisation is joined up to deliver consistently, it’s about ensuring relevance and distinctiveness. What are your thoughts?

Customer-Centric Transformation: What Good Looks Like – Retention – Managing Dissatisfaction – Part 11d of 14


Designing and executing a customer-centric business model requires end to end organisational alignment. Customer-centric capability development cannot take place in isolation to the rest of the business. The customer-centric journey requires a clear quantified understanding of current organisational capability across all 14 capability areas of the SCHEMA® Customer Management framework in the centre of the REAP Customer-Centric Blueprint below. As important as an understanding of current customer management capability is, so too is an understanding of the capability to which the organisation aspires.

Each week I’ll address another single capability area, sharing with you the Transformation Intent to which your organisation should commit to, as well as ‘What Good Looks Like’ for those organisations that have achieved a fairly high level of maturity in the respective capability area.

The REAP Customer-Centric Organisation Blueprint®

REAP CCOB for Blog

This week we are dealing with Retention which is one of the four Execution capability areas represented. The Execution layer relates to the capabilities and control levers needed to optimise customer value and include Retention, Efficiency (understanding cost to serve), Acquisition and Penetration (customer development, cross-sell and up-sell) – collectively referred to as REAP. These are capabilities and initiatives that can be optimised in the short term.

These capabilities support your ability to implement your chosen customer strategies and rely on the fundamental building blocks (Foundations) as well as the Enabling capabilities already discussed in Part 1 to 10 of this series of blog posts.

Each of the four Execution capability areas is made up of sub-components. In developing Retention capabilities it is important to understand the drivers that create and maintain loyalty as well as the factors that destroy it, important to consider how to retain through business as usual, important to consider pro-active retention activity and how to best manage dissatisfaction. Each of these areas is addressed in separate, individual blog posts.

Transformation Intent – Retention

“Retention is all about understanding your customer base and the drivers that create and maintain loyalty as well as the factors that destroy it. Coupled with this is the need to consistently deliver on your promise while ensuring that over-delivery is balanced against the overriding goal of doing just enough to ensure repurchase. A retention strategy also demands that you are pro-active with your customers, monitoring them for signs of defection and implementing constructive plans to generate customer commitment to repurchase. Should customers become dissatisfied, the right flows of communication alert you so that the issues can be addressed promptly and consistently, whilst solving the problem at a root cause level.”

What Good Looks Like – Managing Dissatisfaction

  • Communication of dissatisfaction is encouraged from customers both directly and via staff. It is pro-actively drawn out by internal processes, even if there is no formal complaint.
  • Complaints via regulatory bodies are dealt with enthusiastically and in a way that ensures their response standards are always met. Formal complaints received directly from customers are dealt with consistently across the organisation, to clearly defined standards which are themselves transparent to customers.
  • Analysis of complaints extends to deep ‘root-cause’ levels and reporting is reviewed by very senior managers who are told the whole story.
  • Issues likely to cause widespread dissatisfaction are dealt with quickly and incisively, using social and traditional media, making use of advocates and fans wherever possible.
  • Relationship recovery is seen as an integral part of the dissatisfaction management process and is applied re-actively and/or pro-actively against a clear set of criteria of where it should be applied.

 

For more insight into customer-centric business model innovation as well as more insight into this particular area of the REAP Customer-Centric Blueprint, please see my book “The Customer-Centric Blueprint’ – http://amzn.to/ZILg4y